Treatment of loss of car

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Querist : Anonymous

Querist : Anonymous (Querist)

14 May 2012 We sold a car at rs 100000, and its wdv is rs. 102134. what would be the treatment according to companies act 1956.

Sunil Kr. Sanganeria

Sunil Kr. Sanganeria (Expert)

15 May 2012 You should reduce the wdv amount from the Schedule of Fixed assets and show rs. 2134 as a loss on sale of Fixed assets in Profit and loss acoount.

Querist : Anonymous

Querist : Anonymous (Querist)

16 May 2012 THERE IS NO DEPRICIATION WILL BE CALCULATED?

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

02 August 2025 Great question!

**Treatment of loss on sale of car as per Companies Act, 1956:**

* You have sold the car for ₹1,00,000.
* Its written down value (WDV) is ₹1,02,134.
* So, **loss on sale = WDV - Sale price = ₹2,134**.

### Accounting Treatment:

1. **Remove the asset at WDV from your books:**

```
Accumulated Depreciation A/c Dr (if separately maintained)
Loss on Sale of Asset A/c Dr 2,134
To Car (Fixed Asset) A/c 1,02,134
```

or if only WDV is maintained, simply:

```
Loss on Sale of Asset A/c Dr 2,134
To Car (Fixed Asset) A/c 1,02,134
```

2. **Record the cash received:**

```
Bank / Cash A/c Dr 1,00,000
To Loss on Sale of Asset A/c (for loss) 2,134
To Car (Fixed Asset) A/c 1,02,134
```

(but usually done in two entries: one to remove asset and loss, second to record cash received)

### About Depreciation:

* Since asset is sold during the year, **no further depreciation is charged after the date of sale**.
* Depreciation is charged up to the date of sale only (usually on a pro-rata basis).
* The WDV already includes accumulated depreciation till date of sale.

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So, **you do not calculate depreciation after the sale**. Loss is simply difference between sale price and WDV.

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